Real estate market cooling in two biggest cities

Real estate market cooling in two biggest cities

Sydney and Melbourne are still experiencing an “easing trend”, despite property price growth jumping back during June.

Sydney’s median dwelling price climbed 2.2 per cent last month, while Melbourne’s increased 2.7 per cent, according to CoreLogic.

That marked a significant shift from the May results, when Sydney fell 1.3 per cent and Melbourne fell 1.7 per cent.

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Sydney cooling more than Melbourne

CoreLogic’s head of research, Tim Lawless, said the June revival can partly be explained by seasonal factors.

“Adjusting for this effect suggests an easing trend in housing value growth has persisted through the second quarter of 2017,” he said.

“This trend towards lower capital gains across the combined capitals index is mostly attributable to softer conditions across the Sydney housing market, where quarter-on-quarter growth was recorded at 0.8 per cent over the June quarter; down from 5.0 per cent over the March quarter.

“In contrast, the quarterly trend in Melbourne has been more resilient, with growth easing from 4.2 per cent over the March quarter to 1.5 per cent over the three months ending June.”

Treasurer welcomes housing slowdown

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Treasurer Scott Morrison said the CoreLogic statistics suggest that the Sydney and Melbourne markets will experience a “safe landing” rather than a “crash landing”.

Mr Morrison said that was partly due to APRA, the banking regulator, pressuring lenders to “put the brakes on interest-only lending” – a move he said was producing positive results.

“So to get the balance back in favour of principal-and-interest borrowings… I think was a very wise move from the regulators, fully supported by the government,” he said.

“Now we are seeing the outcomes of that now, that very careful approach that we have been encouraging and supporting, now having this impact in the markets in Sydney and in Melbourne where things are easing off but to a safe landing, not the hard landing that Labor’s policies would deliver.”

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